Impact of offshore outsourcing on your employees

As often happens, i was looking for something else when I came across a 2008 article in IEEE Computer by Mary Lacity and Joseph Rottman (don't worry - the subject matter is covered in their 2008 book, "Offshore Outsourcing of IT work).  Having just set one of our clients off on the implementation of some outsourcing options to supplement their in-house resources, the list of 20 major effects of offshore outsourcing reported by project managers caught my eye.  I strongly recommend that you think of this list as a set of risks that need to be mitigated in any outsourcing implementation.  With apologies to the authors, I have sorted their list according to my highest priorities.  The in-house Project Managers reported that they:

  • needed a mentor the first time they managed a project with offshore resources
  • had to motivate the supplier to share bad news
  • had to make offshore suppliers feel welcome and comfortable
  • needed to thoroughly verify the offshore supplier's work estimates, which tended to be optimistic
  • had to provide greater detail in requirements definitions
  • had to do more knowledge transfer up front
  • were forced to shortcut the knowledge transfer process because of deadlines set by senior IT leaders
  • had to ensure that knowledge transfer was successful by testing the supplier employees' knowledge
  • had to set more frequent milestones
  • needed more frequent and more detailed status reports
  • required more frequent working meetings to prevent client-caused bottlenecks
  • needed to accompany offshore suppliers to all client-facing meetings
  • experienced higher transaction costs which threatened their ability to deliver projects on budget
  • experienced project delays which threatened their ability to deliver projects on time
  • had to guarantee that the supplier followed pre-agreed knowledge renewal practices
  • had to ensure that the supplier transferred knowledge about new applications or technologies to the client
  • had to learn about new applications or technologies independent of suppliers to ensure that the suppliers information and bids were valid
  • had to integrate the suppliers CMM/CMMI processes into their own project management processes
  • had to ensure that the supplier's employees were fully trained as promised by the suppliers
  • had to fill many of the roles the the PMO should have performed
Written by Michael D. Harris at 14:11
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"It's frustrating that there are so many failed software projects when I know from personal experience that it's possible to do so much better - and we can help." 
- Mike Harris, DCG President

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